E*TRADE, the New York-based online brokerage, reported that daily average revenue trades, or DARTs, for the month of November were up 19% compared with the same period last year. However, new brokerage accounts were flat compared with the prior month.
In a press release, E*TRADE Financial Corporation (ETFC) said that DARTs increased 19% compared with October. Derivatives accounted for 31% of DARTs for the month of November. During the month, the company said that it added 41,473 gross new brokerage accounts and ended the month with about 3.6 million brokerage accounts, which is flat with October. DARTs is a way to measure the performance of a brokerage because it shows investors' willingness to invest in stocks. The lack of a jump in new brokerage accounts comes as the stock market is surging, with stocks seemingly setting new highs every month. Other online brokerages are seeing a surge in new account openings.
[Ally Invest offers powerful charting tools and $4.95 trades. Read Investopedia's Ally Invest review to learn more about this low-cost broker.]
For November, E*TRADE said that net new brokerage assets were $1.5 billion, while customer security holdings increased by $6.8 billion and brokerage-related cash jumped by $0.3 billion to $53.1 billion. Margin balances of customers increased $0.5 billion, ending November at $8.9 billion. For November, E*TRADE customers were net buyers of stocks by about $1.6 billion.
DARTs also increased in October at E*TRADE, coming in at 215,689, marking a 7% increase from September and a 28% jump year over year. Derivatives accounted for 31% of DARTs during October. The lackluster showing on the new brokerage accounts fronts in November is in stark contrast to Charles Schwab. The Charles Schwab Corporation (SCHW) reported this week that it added 122,000 new accounts, which is an increase of 31% from last year and marks the twelfth consecutive month that new accounts were more than 100,000.
For E*TRADE's third quarter, the company posted earnings per share of $0.49, which was lower than Wall Street expectations of $0.51 per share and 3% under what the brokerage did in the year-ago third quarter. Revenue of $599 million was able to surpass Wall Street estimates calling for $598 million. During the three months that ended in September, the discount broker said it opened 26,000 net new brokerage accounts, down from 162,000 a year ago. Net new brokerage assets were reported at $2.2 billion, which was also lower than the $5.4 billion E*TRADE logged in last year's third quarter. However, the firm ended the third quarter with total customer assets of $365.3 billion, higher than the $307 billion it had at the end of last year's third quarter.